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IJEBR
27,3
688
Received 7 August 2019
Revised 10 February 2020
11 August 2020
4 November 2020
Accepted 29 November 2020
International Journal of
Entrepreneurial Behavior &
Research
Vol. 27 No. 3, 2021
pp. 688-710
© Emerald Publishing Limited
1355-2554
DOI 10.1108/IJEBR-08-2019-0472
The internationalisation of
TechnoLatinas from a
resource-based perspective
Nuno Arroteia and Khalid Hafeez
De Montfort University, Leicester, UK
Abstract
Purpose – This paper investigates how entrepreneurs in an emerging economy in Latin America bundle
resources to develop capabilities related to entering new markets whilst creating value for their firms. In
particular, the paper explores how individual resources (experiential knowledge and social networks) impact
on entrepreneurs’ capabilities to exploit new market opportunities.
Design/methodology/approach – The paper employs a case study approach to investigate five cases of
entrepreneurs driving technology-based businesses in Brazil. Effectuation theory is used as a lens to ascertain
how resources impact on the decision-making capabilities of the entrepreneurs and firms. The research adopts
a longitudinal approach, capturing data from thirty interviewees over a period corresponding to domestic and
international market entry of these TechnoLatinas ’ businesses.
Findings – This paper builds on previous resource-based view (RBV) studies by supplementing evidence that
individual and firm-level resources determine the development of capabilities to exploit new market
opportunities for new firms. The presence of experiential knowledge (in particular, business planning, market
analysis and experimentation) and social networks (individual resources) drives to a mix of causal and effectual
heuristics; however, in the presence of firm-level resources (human and financial capital), new entrepreneurs
tend to shift towards a stronger causal orientation.
Research limitations/implications – The case companies are high technology, knowledge-intensive
Brazilian start-up firms sharing a similar institutional setting. Further research should include a more diverse
range of cases including other sectors and other countries in Latin America adopting quantitative design to
confirm and generalise these findings.
Practical implications – For policymakers and practitioners, this research provides guidelines on how
entrepreneurs’ know-how and social networks can be enhanced by providing access to the international market
to speed up the growth of a new firm. For entrepreneurship educators, this research explains how effectual
orientation (EO) or causal orientation (CO) influences the entrepreneur to exploit the available resources to
maximise the growth of businesses in the international market.
Originality/value – The resource-based literature usually ignores the challenges faced by new resource-
constrained firms and the individual-level resources of the entrepreneurs. This research contributes to the RBV,
entrepreneurship and internationalisation debate by identifying the interplay between RBV and effectuation
theory, particularly by bringing forward the impact of individual resources and capabilities of entrepreneurs to
make the decision to enter a new market. Moreover, by using the effectuation theory, the research contributes to
a better understanding of how resources are managed to create value and growth in new firms.
Keywords RBV, Effectuation theory, Experiential knowledge, Social networks, Emerging markets,
Internationalisation, Latin America
Paper type Research paper
Introduction
Most of the research carried out in the context of internationalisation of Latin American firms
concerns analysing large and established firms which internationalised following a sequence
of market liberalisation policies in the 1980 and 1990s – these firms became widely known as
Multilatinas (Cuervo-Cazurra, 2016). Multilatinas are family-led or state-owned
conglomerates that have grown and matured domestically due to their control and
exploitation of critical natural resources (mostly commodities); these large corporations
started to internationalise by using their industry-specific technological resources and
capabilities to target international customers in similar industries as those in which they
operated domestically (Hernandez and Guill
en, 2018).
 More recently, an emerging phenomenon has been identified related to technology-based The
businesses in Latin America which have been coined as TechnoLatinas (Arroteia and Hafeez, internationali-
2017; Barbero, 2018; Sangmeister, 2019). TechnoLatinas are typically start-up firms of an
entrepreneurial nature, knowledge-based, small in size, with research spin-offs into high
sation of
technology in a wide range of sectors (including, but not limited to, those where Multilatinas TechnoLatinas
operate). Unlike Multilatinas, TechnoLatinas have a broader footprint including health and
life sciences, biotechnology, engineering and IT; they innovate in niches domestically and
subsequently target a broad range of international customers at very early stages (before 689
reaching maturity in their domestic markets). This research focusses on investigating how
TechnoLatinas’ entrepreneurs make decisions to enter a new market (domestic and
international) to create value.
There is a heated debate in the international entrepreneurship literature concerning how
entrepreneurs make decisions to create value (McMullen and Dimov, 2013; Davidsson, 2015).
According to the resource-based view (RBV), the basis for value creation is dependent on
possessing and/or having access to rare, imperfectly imitable and imperfectly substitutable
resources (Sirmon et al., 2007). However, merely possessing such resources does not
inevitably lead to the creation of value as firms differ in the way they use resources, which can
be attributed to their capabilities (Teece et al., 1997). Capabilities are related to something that
the firm “does” and not what the firm “has” (Andersen and Kheam, 1998) and are
implemented by its human capital (Spanos and Lioukas, 2001).
In nascent firms (such as in the case of TechnoLatinas) where few or no firm-level resources
exist–and frequently with no human capital beyond the entrepreneurs – it is the
entrepreneurs themselves who make a difference in terms of creating value (Kraaijenbrink
et al., 2010; Sarasvathy et al., 2013). The entrepreneurs shape firm-level outcomes, therefore
impacting on how emerging market firms are able to compete internationally (Rui et al., 2016;
Aguinis et al., 2020).
Even though some researchers have tackled the significance of intangible resources in
driving Latin American firms’ growth, such as entrepreneurial orientation (West et al., 2007)
and entrepreneurs’ characteristics (Capelleras and Rabetino, 2008), there is a still a lack of
knowledge into how entrepreneurs’ impact value creation for the nascent firms originating in
these geographies (Popli et al., 2017; Hermans and Borda Reyes, 2020).
This research will address this knowledge gap investigating how entrepreneurs bundle
resources to build capabilities leading to value creation for new firms in Latin America. The
individual resources under scrutiny are experiential knowledge and social networks. The
entrepreneurs’ capabilities under examination are the exploitation of new market
opportunities (Sirmon et al., 2007). To ascertain how the individual resources deploy into
capabilities, the market-entry decisions made by entrepreneurs will be investigated through
the theoretical lens of effectuation theory (Sarasvathy, 2001a, b).
Conventionally, the RBV gives dominant attention to resource heterogeneity (which is a
driver of competitive advantages for the firm) (Barney, 1991; Barney et al., 2001), but does not
question how these resources are created, especially in the context of new firms where
resources are usually limited (Alvarez and Busenitz, 2001; Brown et al., 2019). On the other
hand, the RBV focuses on resources as an ex post approach and, in contrast, effectuation is a
practice that unveils what entrepreneurs do with resources (ex-ante) (Sarasvathy, 2001a, b;
Rugman and Verbeke, 2002; Foss et al., 2008). Infusing the RBV with a subjectivist approach
to entrepreneurship (such as with effectuation theory) promises a more comprehensive
theoretical approach to entrepreneurship research, as it paves the way to the integration of
“superior entrepreneurial judgment–a phenomenon that enables entrepreneurs to make
superior resource acquisition, development, and allocation decisions repeatedly, creating a
series of competitive advantages across time” (Foss et al., 2008, p. 88).
IJEBR Effectuation is an RBV and is particularly suited as an approach when the individual level
27,3 of analysis is present, such as the entrepreneur; moreover, effectuation has also been applied
to ascertain the link between how entrepreneurs make decisions and the value creation
outcomes of nascent firms, particularly in the context of market entry (Cai et al., 2017; Eyana
et al., 2018; Szambelan et al., 2019).
This research is exploratory in nature and adopts a longitudinal approach to investigating
multiple case studies of Brazilian technology firms (TechnoLatinas) at two distinct moments
690 in time, the first coinciding with the start of the business domestically and the second at the
beginning of internationalisation. The choice of an emerging economy (Brazil) is the ideal
setting for this research, as in the contexts of higher risk and uncertainty the process of
starting and growing technology businesses is considerably different to that in developed or
advanced economies (Senik et al., 2011; Kiss et al., 2012). There is also a dearth of research
regarding the value creation by firms in emerging economies, which are usually characterised
by less available resources whilst operating in a relatively volatile environment compared to
developed counterparts (Popli et al., 2017).
The RBV can inform and extend the entrepreneurship literature as it is through learning
from experiences that entrepreneurs mobilise and allocate resources (Alvarez and Busenitz,
2001; Rui et al., 2016). This research contributes to the RBV as it deepens our understanding of
how entrepreneurs’ resources deploy into capabilities (Sirmon et al., 2007). The research
enables one to address one of the drawbacks of RBV by investigating how entrepreneurs’
individual resources can lead to the desired value creation in the case of nascent businesses
with no track record and who have few given resources to start with. By adopting a
longitudinal perspective, it contributes to a better comprehension of how changes in the
resources may also affect entrepreneurs’ decisions overtime (Krueger et al., 2000). The
research also sheds new light into the RBV in the context of an emerging economy and
specifically concerning technology firms entering the market. Moreover, ascertaining how
entrepreneurs in emerging economies in Latin America make decisions to internationalise
may also deepen our knowledge and eventually challenge entrepreneurship theories that
typically originate from developed regions of the world (Aguinis et al., 2020).
The paper begins with the introduction of the conceptual framework which will proceed
with the investigation. Subsequently, the research design and methodology is described, and
the choice of a qualitative case study approach is justified. Later, data analysis and the main
findings are outlined and discussed, implications to theory and practice are highlighted, and
limitations and opportunities for further research are outlined. Finally, a series of conclusions
are drawn.

Conceptual framework
According to RBV, resource management is the process of structuring the firm’s resource
portfolio, bundling the resources to build capabilities and leveraging those capabilities to create
value (Sirmon et al., 2007). Value can be perceived from a customer perspective, whereby
customers make purchase decisions based on the attributes of price and performance of
goods or services, hence impacting on a firm’s volume of sales (Sirmon et al., 2007). The first
step in the resource management is structuring the resource portfolio which involves using
processes to acquire, develop or divest existing resources. Examples of firm-level resources in
a portfolio are financial assets or physical assets such as the technology, infrastructure and
equipment (Mahoney, 2004), human capital (Unger et al., 2011), relational capital
(Kellermanns et al., 2016), organisational processes and procedures (Sirmon et al., 2007).
However, merely possessing such resources does not inevitably lead to the creation of value,
as firms with similar resources may differ in the way they manage them, which can be
attributed to their capabilities (Teece et al., 1997).
 Capabilities are the ability to perform a particular task or activity (Hafeez and The
Abdelmeguid, 2003; Helfat and Peteraf, 2009) and are related to something that the firm internationali-
“does” and not that the firm “has” (Andersen and Kheam, 1998). This corresponds to
organisational and management processes that are developed and implemented by a firm’s
sation of
human capital (Spanos and Lioukas, 2001). In this sense, firms may differ in the way they use TechnoLatinas
resources to form capabilities, which can be attributed to their human capital (Zubac
et al., 2010).
However, in nascent firms with few or no human capital (beyond the entrepreneurs), it is, 691
by and large, the entrepreneurs that are pivotal to the creation of value. Hence, the capabilities
of the entrepreneurs (i.e. who they are, what they know and who they know) enable them to
connect the dots; therefore, the creation of value occurs because certain entrepreneurs have
specific capabilities which others do not (Foss et al., 2008).
As noted, the RBV literature follows on from firm-level resources and capabilities to
identify causes of value creation for medium to large established firms (Brown et al., 2019).
However, it lacks a specific understanding of how the individual-level resources of
entrepreneurs might be relevant to the creation of value, particularly amongst nascent firms
(Kraaijenbrink et al., 2015).
This research will address this gap by investigating how entrepreneurs bundle resources
to build capabilities related to the exploitation of new market opportunities by entering a new
market with an existing and/or new product/service. This research will look at individual-
level resources such as experiential knowledge (Johanson and Mattsson, 2015) related to
market knowledge about clients, competitors and institutional contexts (Eriksson et al., 2015).
This research will also look at entrepreneurs’ social networks, as forged via work
relationships.
Another shortfall in the RBV literature is related to the processes used to bundle resources
to build capabilities aimed at value creation. The RBV literature is rich in relating resources
as precursors of value creation, albeit less insightful with regard to outlining the underlying
processes whereby resources create value for the firm (Sirmon et al., 2007; Zubac et al. 2010).
This research will address this gap by investigating how entrepreneurs bundle resources to
build capabilities related to the exploitation of new market opportunities, through the lens of
effectuation theory (Sarasvathy, 2001a, b).

The use of effectuation as a lens to explain entrepreneurial decision-making

Sarasvathy’s (2001a, b) theory of effectuation is rooted in the necessity to understand how
entrepreneurs make decisions in the presence of high uncertainty and risk, such as when
entering a new market. Effectuation theory identifies that entrepreneurs combine distinct
heuristics when making decisions (Sarasvathy and Dew, 2005), namely effectual orientation
(EO) [1] and causal orientation (CO). This section will summarise key sub-constructs
pertaining to the EO and CO, that are subsequently used to better understand how
entrepreneurs bundle resources to build capabilities related to the exploitation of new market
opportunities.
EO is described for situations when entrepreneurs are uncertain about the future and use
the available means on a trial and error basis to explore the outcomes and see what works
better for them. Therefore, entrepreneurs define criteria for selecting between effects whilst
not sacrificing more than they can afford to lose and/or putting the business at risk (means
orientation) (Wiltbank et al., 2006). EO is related to substantive business planning (Brinckmann
et al., 2019) which addresses external contingencies by applying experimentation and
flexibility (Laskovaia et al., 2019). Experimentation is associated with short-term tests (e.g.
different actions to promote and/or distribute a product or a service), whereas flexibility is
associated with adapting the business model to the eventualities (Chandler et al., 2011).
Effectuators may rely on pre-commitments with partners. Pre-commitments allow for the
IJEBR mitigation (or diversification) of risks without having to own all the resources which the
27,3 entrepreneurs would otherwise require (Sarasvathy and Venkataraman, 2011).
A CO starts with the assumption that the future is predictable, and goals are
predetermined. The anatomy of a causal decision involves a precise goal, a set of
alternative means and the definition of criteria for selecting between means (goal orientation)
(Sarasvathy, 2001a, b). Goals determine the actions taken towards the maximising of expected
returns. Causators avoid contingencies by conducting competitive market analysis and
692 business planning (formal business planning). CO does not involve pre-commitments; in this
case, network relationships are instrumental, specific and predetermined to acquire and/or
develop essential resources and by a competitive attitude and the desire to limit the dilution of
ownership (Dew et al., 2009). However, EO and CO are not mutually exclusive and may occur
simultaneously as the entrepreneurs may draw on specific sub-constructs belonging to each
heuristic and combine them as required (Chandler et al., 2011).
The human capital existing in an organisation may determine the path through which
entrepreneurs adopt certain managerial practices as they are influenced by others (Ployhart
et al., 2011); financial capital provided by third parties (e.g. from banks, public grants or
venture capitalists) may dictate that entrepreneurs had to learn to abide by regulations to
secure such funding (Honig and Karlsson, 2004; Brinckmann et al., 2019). In this sense, it is
important not to overlook the potential impact of firm-level resources that may influence the
decision-making process of entrepreneurs in creating value.
We summarise the above in Figure 1 as the overarching conceptual framework for this
research.
Specifically, we will seek to address the following research questions:
RQ1. How can the experiential knowledge of entrepreneurs impact the development of
capabilities to exploit new market opportunities?
RQ2. How can the social networks of entrepreneurs impact the development of
capabilities to exploit new market opportunities?
RQ3. How can EO and CO affect the development of capabilities by entrepreneurs to
exploit new (domestic or international) market opportunities?
RQ4. To what extent can different resources impact the EO or CO of the entrepreneurs?

Entrepreneur’s
Knowledge,
Know-how
Value creaon in
domesc market
entry

Capabilies
Entrepreneur’s related to
Entrepreneur’s
heuriscs exploing new
Social Networks
(EO, CO) market
opportunies

Value creaon in
internaonal
market entry
Firm’s
Resources
Figure 1. Human Capital,
Financial Capital
Conceptual framework
Research methodology The
The choice of multiple case studies was assisted by its suitability to provide additional internationali-
insights into the context in which a phenomenon occurs holistically and is impacted by
human behaviours (Yin, 1984) (See Table 3). Case studies are effective as a means of
sation of
understanding the links between the external context and chronological decision-making, as TechnoLatinas
typically occurs in business research (Ghauri, 2004). The choice of multiple cases allows the
researchers to ask the same question of different entrepreneurs and to make direct
comparisons. 693
To enable for a like-to-like comparison, we observed the following criteria. The five case
study firms are technology-based start-ups led by single entrepreneurs, were started in Brazil
and initiated internationalisation by exports or foreign direct investment (FDI) within 10
years from the beginning of their domestic activity. The timelapse (of ten years) was deemed
adequate to enable us to monitor how the firms have evolved from start to early
internationalisation, particularly by observing the changes in the entrepreneurs’ resources
(Musteen et al., 2014). The second criterion for sample selection was that firms were exposed
to similar environmental settings/conditions at their inceptions and operate in a
knowledge-intensive industry. Therefore, we confined our sample to spin-offs, started at
business incubators and/or started by the entrepreneurs while (or shortly after) studying in a
Brazilian university. These conditions enabled us to establish a common basis for comparing
and contrasting between cases. The third criterion was to choose cases that provided good
access to secondary information, as well as allowing for straightforward (and willing) access
to the entrepreneur to conduct interviews. The fourth criterion was to ensure that the sample
firms are already operating in the domestic as well as international market (Stake, 1995).
Further, we resorted to selecting firms located in the vicinity of Rio de Janeiro or S~ao Paulo
(the two biggest cities in Brazil). This was purely a logistical-based criterion. Considering the
geographical size of Brazil, reaching out to firms scattered across the wide geographical
spread of Brazil for fieldwork (practically, for conducting face-to-face multiple on-site
interviews) was not feasible. We were also guided by the saturation threshold logic in
selecting the total number of cases, whereby additional cases would not provide further
theoretical insights (Kalinic et al., 2014).

Data collection
The entrepreneur was the main unit of analysis to elicit information about the individual
resources (experiential knowledge and social networks), as well as the effectual and/or causal
heuristics of the entrepreneurs. However, the secondary unit of analysis was the firm level, to
analyse the firm-level resources, in particular, human and financial capital. The primary data
were collected using a semi-structured questionnaire that was administered in face-to-face
meetings, which were held as close to their decision-making process to minimise the
occurrence of recall biases (Pauwels and Matthyssens, 2004), at the firms’ premises during
2012 and 2013. Subsequent meetings were conducted through video conferencing in 2016 and
2017 (See Table 1). The interviews were held in Portuguese language.
Additional semi-structured questionnaires were conducted for triangulation purposes
(Yin, 1984) at the beginning of the research when conducting the on-site interviews with the
entrepreneurs in Brazil: two with managers of business incubators; three with managers of
venture capital funds, which had invested in the firms; three with managers of the Brazilian
National Development Bank and six with founders of other start-ups initiated on the same
premises as the cases in the study. Also, there was frequent exchange of emails to either
communicate the summary outcome of each interview or to seek further information.
The recorded (interview) data were transcribed into Portuguese and subsequently
translated into English. In total, thirty semi-structured questionnaires were conducted.
IJEBR Interviews and
27,3 additional contacts Case HRM Case INT Case OIL Case SUB Case VIS

First interview with In person In person In person In person In person

the entrepreneur 92 min in 2012 95 min in 2012 115 min in 75 min in 123 min in 2012
(duration in minutes 2012 2012
and event year)
694 Second/third interview In person By video By video By video By video chat
with the entrepreneur 54 min in 2013 chat 45 min in chat 33 min chat 20 min in 2015 and
(duration in minutes and by video 2017 in 2017 20 min in 25 min in 2017
and event year) chat 35 min in 2017
2017
Subsequent contacts By E-mail By E-mail By E-mail By E-mail By E-mail (twice
made (number of (twice in 2013) (once in 2017) (twice in (twice in in 2013; twice in
contacts made/ year) 2017) 2016) 2015; once in 2016;
once in 2017)
Additional interviews In person In person In person N/A In person
with other staff Business Business Business Two marketing
Table 1. partner partner partner managers (group)
Sources used for 30 min in 2013 35 min in 2013 32 min in for 69 min in 2014
primary data collection 2013

The collection of qualitative and quantitative secondary data overlapped with the semi-
structured questionnaires to allow for an in-depth understanding and confrontation of the
interviewees. Table 2 illustrates the secondary data sources (marked with an “x”) including
the documents and reports used for triangulation purposes.

Data analysis
The analysis of the data was conducted in conjunction with its collection (Miles et al., 1994) to
move beyond understanding the point of view of the individuals being studied and
interpreting data against the context in which they are produced (Welter, 2011). The case
studies were conducted sequentially. The transcripts of the interviews were analysed
through thematic analysis (Strauss and Corbin, 1990; Ghauri, 2004) to identify the different
heuristics which the entrepreneurs’ had followed (CO or EO) at the various different moments
in time that coincided with the domestic market entry and the start of the internationalisation
process.
As a starting point to conduct the thematic analysis, we have defined the themes or
patterns of meaning (Braun and Clarke, 2006). For this, we resorted to the sub-constructs of
EO: substantive business planning, means orientation, pre-commitments, experimentation and
flexibility and CO: formal business planning, competition and market analysis, goals orientation,
planned networking and the maximisation of expected returns in the effectuation literature.

Source Case HRM Case INT Case OIL Case SUB Case VIS

Website x x x x x
Table 2. Balance and P&L x x x x x
Sources used for Market and competitor analysis x x x x x
secondary data R&D reports x x
collection Business Plans x x x x x
 Case 1 – HRM Case 2 – INT Case 3 – OIL Case 4 – SUB Case 5 – VIS

Services IT Software for human Analysing Big Data Satellite Imagery Sonar Imagery IT for Supply chain
resource management Analysis to identify oil Analysis for management
exudation on the monitoring underwater
seabed equipment
Main customers Banks, insurance and Retail businesses with e- Oil and gas Oil, gas, chemicals and Manufacturing,
retailers commerce websites petrochemicals telecommunications and
logistics
Proprietary technology No No Yes Yes No
Year created/ domestic Created in 1999 Created in 2009 Created in 2010 Created in 2007 Created in 2002
market entry
Sales volume in the 496k USD 810k USD 350K USD 922K USD 5,455K USD
domestic market in the
year before
internationalisation
started
Year of foreign market In 2002 initiated exports to Opened a subsidiary Established a In 2012 initiated a joint In 2010 initiated FDI into
entry and entry mode Spain via an agent and a company in Houston (USA) subsidiary in Lisbon venture in the USA the UK
joint venture in 2015 (foreign direct (Portugal) in 2017 (FDI)
investment/FDI) (FDI)
Employees at the start 10 6 4 12 150
of internationalisation
Country of origin Brazil Brazil Brazil Brazil Brazil
Rationale for the choice Initiated Capital intensive Initiated Capital intensive Capital intensive Initiated
of the case internationalisation with internationalisation with technology started in a Technology. Started in internationalisation with
exports and FDI FDI. Invested by venture business incubator a business incubator FDI.
capitalists Invested by venture Started in a business
capitalists incubator

(continued )
TechnoLatinas

695

international entry of
demography of
sation of

domestic and
experience and
The

Entrepreneurs
Table 3.

the sample Cases

internationali-

Table 3.
Case 1 – HRM
Profile of the Founder had 10þ years of
entrepreneur(s) work experience in the IT
sector and was 30 years old
when started the firm.
Postgraduation in software
systems engineering
Case 2 – INT
Founder had 5þ years’
work experience in the IT
sector and was 25 years old
when started the firm.
Postgraduation in systems
engineering
27,3
696
IJEBR
Case 3 – OIL Case 4 – SUB Case 5 – VIS
Founder experienced Founder experienced Founder had no prior
developing and developing and market work experience. Was 23
market testing testing technology as years od when started the
technology as an engineering student. company. Postgraduation
postgraduate ocean Had prior working in systems engineering
engineering. Had no experience and started
prior working other firms (non-
experience except as a technology based). Was
researcher in 28 years old when the
academia. Was 29 company stared
years old when the
company stared
 When reading through the transcripts we considered the realistic epistemology stance The
(Braun and Clarke, 2006), which allowed us to ascertain how the entrepreneurs think and feel internationali-
about the way they have made the decisions related to their business activity. We collated the
phrases and/or expressions used by each interviewee that we identified as broadly reflecting
sation of
one or more of the sub-constructs identified on a table, dividing separate columns into the TechnoLatinas
different themes. When a phrase or expression was identified as belonging to more than one
theme, it was recorded in duplicate in the respective column.
Subsequently, we have used a subjective assessment procedure to quantify our 697
assessments (Hafeez et al., 2006). From our overall subjective assessment, if we identify a
substantial influence of the identified EO or CO sub-construct we assigned a 1 (one), or a
0 (zero) otherwise (See Table 4).
Subsequently, based on the available primary and secondary information, the researchers
have mapped the presence of the different resources: experiential knowledge and social
networks (individual-level) and human and financial capital (firm-level). The manifestations
of EO or CO and the resources were mapped in each case in chronological order to facilitate
the study of the interrelationships between them, as well as the identification of cross-case
commonalities and differences. Once one researcher concluded this process, the other
replicated it and the differences in interpretations were discussed, ultimately conforming to a
consensus of opinion and revising the coding as appropriate (Miles et al., 1994; Huberman and
Miles, 2002).

Presentation of the results

Contextualising the Brazilian economic reforms that enabled the development of
entrepreneur’s experiential knowledge and social network
The entrepreneurs investigated in this research, all started their businesses in Brazil and
initiated internationalisation during the first decade of the 21st century. This coincides with
the period in which Brazil experienced a surge in the number of small- and medium-sized
enterprises, including technology-based firms (TechnoLatinas). According to the IBGE
(2014), in 1992 there were 793 industrial firms (mostly state-owned conglomerates). However,
these had increased to over 334,000 by the end of 2012 (predominantly SMEs). The number of
commercial firms increased from 55,000 in 1992 to 1.6 million in 2012, and service firms grew
in number from 919,000 in 2002 to 1.17 million in 2012 (Stallings and Peres, 2011; Lahorgue
et al., 2012). This transformation of the economic landscape was the result of profound

Case OIL Case SUB Case INT Case HRM Case VIS
Influence of EO and CO sub-constructs Dom Int Dom Int Dom Int Dom Int Dom Int

Formal business planning (CO) 1 1 1 1 1 1 0 1 0 1

Competition and market analysis (CO) 1 1 1 1 1 1 0 0 0 1
Goals orientation (CO) 1 1 1 1 1 1 0 1 1 1
Planned networking (CO) 0 1 0 1 0 1 1 1 0 1
Maximisation of expected returns (CO) 0 1 0 1 0 1 0 1 0 1
Sum of manifestations of CO 3 5 3 5 3 5 1 4 1 5
Substantive Business Planning (EO) 0 0 0 0 0 0 1 0 1 0
Means orientation (EO) 0 0 0 0 1 0 1 0 1 0
Pre-commitments (EO) 1 0 1 0 1 0 0 0 0 0
Table 4.
Experimentation (EO) 1 0 1 0 1 0 1 0 1 0 Entrepreneurs’ EO and
Flexibility (EO) 0 0 0 0 0 0 1 0 1 0 CO when entering the
Sum of manifestations of EO 2 0 2 0 3 0 4 0 4 0 domestic (Dom) and
Dominant heuristic CO CO CO CO 5 CO EO CO EO CO international (Int)
Note(s): 1: substantial influence of the EO or CO sub-construct; 0 5 no influence of the EO or CO sub-construct markets
IJEBR economic reforms which started in the late 1980s and that continued until the end of the 20th
27,3 century to abolish trade barriers, create more efficient capital markets, privatise public
enterprises and make significant investments to support economic and social growth
(Santiso, 2005).
The Brazilian economic reforms impacted on the creation and wide availability of
financial and support mechanisms for small and medium enterprises in general and
knowledge-intensive firms in particular (Neto, 2012). Therefore, financial help and support
698 structures were put in place to facilitate the university-led research into spin-offs (Lahorgue
et al., 2012). By 2013, Brazil had created 94 technology parks hosting over 1,000 SMEs and 384
business incubators hosting 2,640 start-ups; public funds made capital available to invest in
technology start-ups and incentivise the collaboration between nascent firms and bigger
companies (Ramalho et al., 2011). Incubation programmes have offered training and
networking opportunities for entrepreneurs (e.g. Start-up Brazil) (Amal and Rocha Freitag
Filho, 2010).

How experiential knowledge and social networks impacted the development of capabilities to
exploit the domestic market entry
We seek to explore how the entrepreneur’s experiential knowledge and social networks have
affected the development of their capabilities related to exploiting new opportunities in the
domestic market (and subsequently, in the international market). Table 3 provides a
summary illustrating the history of the sample cases along with the core capability of each
firm and the experiential knowledge and work experience of the respective entrepreneurs(s).
We start by exploring and confirming case #1 HRM whose main capability was software
skills for managing human resource processes in large organisations. The firm’s founder had
acquired substantial working experience and know-how of the market and competitors by
working for over 10 years for IT firms across different industries. Based on prior knowledge,
the founder adopted a systemic and step-by-step approach to enter the market by
approaching different customers, showcasing their capabilities, whilst learning more about
the customers’ needs and feeding that information to the development of the new software
solutions as their core product. The founder ensured to keep operating costs low (relying
considerably on his personal savings) and remained flexible with regard to adapting to the
market as the management team was unsure how their customers would react to their niche
offer in changing circumstances. The founder relied extensively on his own professional
network to access new contacts and potential customers. In his own words:
One thing that I have learned from my previous experience was that all the customers are different
although they may have similar needs. . . we cannot plan when it comes to selling IT services as we
inevitably find that different businesses require different actions if we want to satisfy and keep them.
Hence, our approach at the start of the business was remaining flexible and adapting our resources to
their needs.
In case firm #2 INT, the entrepreneur had already accrued approximately 5 years of working
experience in IT project management with prominent Brazilian multinationals before starting
his own business. The core product of the company was an e-commerce solution to large-scale
online retailers. Based on his experiential knowledge, the founder fully understood the
importance of developing a robust technological capability that would not fail their
customers. Therefore, the founder devoted the first year of the business to perfecting the
technology. On the other hand, he also knew the importance of having the support of partners
or customers who would be willing to pilot the technology (before launching it onto the wider
market). Therefore, from an early stage, he developed and maintained a close relationship
with a Brazilian media group who were interested in becoming INT’s first customer. During
the first year, the entrepreneur relied solely on his savings to support the liquidity of the firm.
 We knew that timing was an issue for us and if we had not moved quickly someone else could take The
the lead. . . that is why it was so important at that stage to define a road map and plan things to move
faster than our competitors. (Founder of INT) internationali-
sation of
It was interesting to note that the first-time (founder) entrepreneurs for case Firm #3 OIL and TechnoLatinas
case Firm #4 SUB’s initially developed their knowledge through academic research. During
this time, they also started developing their social network with professionals from the
relevant oil and gas industry. Interestingly, they used their social network to seek guidance 699
and demand patterns at the initiation stage of their business ventures. Also, they used their
social network to access their partners’ networks which, in their opinion, played a vital role as
they facilitated experimenting and testing their technology further. This networking enabled
them to adapt, innovate and polish their technology capability to better serve the market and
leverage it to expand their business. As the founder of case Companies #3 and #4,
respectively, quoted:
We have been working with them [referring to the industry partners] before we started the firm. . .
their support addressed all the different stages from the idea to developing and testing the
technology, which was vital for a start-up like ours. We could learn from their methodologies and
access their resources and knowledge. . . moreover, displaying the business relationship with them is
a huge advantage to legitimate our business in this highly competitive and difficult market. (Founder
of OIL)
We created the technology targeting the shipping industry, but soon understood that the customers
who needed such assistance were in the oil and gas sector. . . using our networks we could define a
list of potential customers to target and approach once the business was ready to roll out on to the
market. (Founder of SUB)
Before starting their businesses, case firms SUB and OIL’s entrepreneurs were accustomed to
using public grants (as students) to fund research projects. Upon gaining a few years of
experience as researchers, they had learnt that to spin-out their research into real business
they required funds for ongoing R&D and buying equipment and materials (as their core
businesses are both capital intensive). Besides, their early experience enabled them to seek
further support from governmental sources. As before, these applications involved
developing detailed project plans, specifying the efficient use of the funds, the expected
outcomes, as well as the potential market prospects related to commercialisation of the said
technologies. Once the grants were allocated, the entrepreneurs had to report to the funding
authorities regarding how the money was being spent and any reasons for any deviations
from the target and their associated justifications. In this sense, the funding process
effectively forced these entrepreneurs to learn advanced planning and project-management
techniques, as well as developing strategies to enter the (domestic and international) market
with their services. As per OIL’s founder:
The experience, which we had accumulated. . . in relation to understanding the fit between the
technology and the market was invaluable to our business. . . we learned practical methods related to
managing a project, setting goals and monitoring the project to keep us on track.
The entrepreneurs of SUB and OIL had no prior working experience and no specific business
training. Moreover, their social networks were mostly limited to contacts which they had
established as students. In their opinions, this was a major shortfall in their exploration of
new business opportunities in the market, and they appreciated the support provided by the
business incubators in their respective universities to overcome this.
I had previous experience starting non-tech businesses. . . but was very unaware of the specificities
of managing a technological business. . . and therefore have decided to apply for the incubator before
IJEBR starting the business where I learned how to prioritise and allocate resources. . . and securing
resources without which our research could not be conducted. (Founder of SUB).
27,3
The training programmes provided for them by the business incubators improved their
knowledge about analysing the market and competition, as well as how to create business
plans to drive the growth of their businesses on the market.
There is a barrier, which is not small when you are a Brazilian start-up with innovative technology in
700 a market that has already made much money for a long time. . . being a technology-intensive
business our challenge is to overcome these barriers by conducting a business plan, defining our
goals, and network actions in anticipation. . . thus, ensuring a systematic approach to enter the
market. (Founder of OIL)
Similarly, case Firm #5 VIS’s founder had no prior experience before starting the firm. He had
academic knowledge and anecdotal evidence that he had learnt during his postgraduate
studies. As part of an academic project, he assessed the demand for services in supply chain
design/optimisation, particularly for firms operating in the transport and manufacturing
sectors. However, he lacked any real knowledge of how to enter the market in that specific
sector. He also lacked sufficient contacts to access the required knowledge and seek
customers. To address these shortcomings, he planned to start up his business in the
university business incubator. Being an engineering graduate alumnus, this enabled him to
acquire essential training in business and management and conduct market analysis. This
facilitated his subsequent exploration of networking opportunities with peers and potential
customers and the setting up of his initial social network. As per VIS’s founder:
Convincing the client to “invest” in five recent grads was a challenge. . . the proximity to the
incubator was fundamental to gain knowledge in business and management as well as to project an
image of reliability and credibility towards customers. . ..

How experiential knowledge and social networks impacted the development of capabilities to
exploit the international market entry
We explored how the experiential knowledge and social networks generated through
domestic entry have leveraged the decision-making capability of these entrepreneurs to enter
the international market. In the case of HRM, the internationalisation opportunity arose when
the entrepreneur was approached by a Spanish multinational customer who was entering the
Brazilian market. This led the company to realise the prevalence of many Spanish firms
operating in Brazil and to see Spain as a target market due to language and cultural affinity
[2]. Once the decision was made, the entrepreneur used his network to identify a business
partner in the Spanish market. Subsequently, he identified the potential, using Spain as a
base, to expand their footprint in other European markets. In the same year (of entry into the
Spanish market), he worked with the partner on a business plan and accumulated sufficient
resources to start a new firm.
On the other hand, after entering the domestic (Brazilian) market, SUB and INT’s
entrepreneurs continued to look for external funding to support the growth of their
businesses. They knew that the public grants they had accessed were exclusively for R&D
purposes and would not support the commercialisation and marketing activities. They also
realised the power of their social networks to identify potential investors. To apply for venture
capital funds these entrepreneurs had to write elaborative business plans with market analysis
and financial forecasts. Consequently, SUB received an investment offered by CRIATEC
(venture capital fund) and INT from a private investor. Furthermore, SUB’s founder was also
able to exploit their customers’ networks to access investors from the USA (where they
intended to enter first), and he successfully attracted an additional investment in 2012 leading
to the opening of a joint venture in Houston. He could put together a convincing market entry
plan for the US market and gained the required capital from a private investor. Besides access The
to the financial capital, the entrepreneur also learnt how to enter international markets, internationali-
conduct competitor analysis and understand different institutional environments. All this
augmented his experiential knowledge of internationalisation.
sation of
The founders of OIL and INT realised early on that they lacked sufficient knowledge and TechnoLatinas
experience to enter the international market. Therefore, they also sought assistance from
their professional networks and academic partners. Specifically, in 2014 OIL’s founder
participated in a project with postgraduate students from the University of California and Los 701
Angeles (USA). This enabled him to investigate global opportunities, plan market entry
strategies and raise funds from international investors. INT’s founder received training in
internationalisation strategies and international markets by participating in a similar
programme conducted at the Michigan Institute of Technology (USA) in 2015:
This project was vital to initiate the firm’s plans towards entering the USA as they have helped us to
create a go-to-market plan with a complete market analysis and a structured plan of actions.
In the early stages of internationalisation, OIL, SUB and INT’s entrepreneurs had maintained
collaboration with their networks to support the ongoing efforts related to identifying
international business opportunities.
We rely on following the Brazilian companies that we know to open doors internationally. . . We base
our assumptions on the trust that we have built with our customers in Brazil. (Founder of INT)
We will start exploring the networks, which we have already established with our customers. . . and
preferably Brazilian multinationals expanding abroad. (Founder of OIL)
In the cases of OIL, SUB and INT, it was also noteworthy how these entrepreneurs decided to
reinforce their human capital to meet their lack of certain knowledge by hiring new staff. To
assist in the international expansion of the firm, the founder of OIL recruited a director with
experience in business management for prominent Brazilian multinationals in the oil, gas and
mining sectors. As the new director noted:
My background in the corporate world and working for prominent Brazilian multinationals is
important to support achieving the business’s objectives. . . moreover, I am addicted to planning a
business strategy and controlling and will bring these important skills into the firm.
VIS’s entrepreneur devised an internationalisation strategy whereby they would attract new
business partners who had already established business consulting practices in foreign
markets, and who would benefit from accessing VIS’s knowledge and resources based in
Brazil (VIS had grown its employee base to over 150 staff in Brazil before initiating
internationalisation activities). The new partners were subject to contractual agreements
with VIS whereby mutual responsibilities, including the commitment of financial resources
for the development of the business, as well as the distribution of dividends, were agreed and
forecasted. The firm opened its first subsidiary abroad via a joint venture in the UK.
INT’s entrepreneur recruited a director who worked for the venture capital fund that had
invested in the firm. In the same vein, SUB’s entrepreneurs benefited from the knowledge
brought into the firm by the executives at CRIATEC, which had also invested in the firm. As
per one of CRIATEC’s managers who worked with the founder of SUB:
Beyond the financial contributions for the business, they lack skills in business planning and
development. . . with our support, they will be better able to mitigate the adversities of entering this
highly competitive market.
We summarise these findings in Table 4, which highlights a cross-case analysis evidencing
the presence of EO and CO at the stage when they entered the Brazilian domestic market and
IJEBR started internationalisation. By translating subjective analysis into a quantitative value
27,3 (1 5 presence of that attribute; or 0 5 absence of that attribute) we provide an overall analysis
of the subjective findings of our results in Table 4. We also provide a summary row to identify
the dominant heuristic (EO or CO). For example, in Table 4 for the OIL case, for domestic
entry the manifestation of CO is 3, where EO is 2, therefore we qualify CO as dominant;
however, for the HRM case, for the domestic entry we valued the manifestation of CO as 1, but
the EO as 4; therefore, EO was dominant at the domestic market entry stage.
702

Discussion
The findings suggest that entrepreneurs bundled different resources to develop capabilities
towards entering new markets (Sirmon et al., 2007). The experiential knowledge of the
entrepreneurs has impacted on the development of capabilities to enter the domestic market.
At the stage when they entered the domestic market, the founders of OIL, SUB and INT
applied their experiential knowledge and training in business incubators and demonstrated a
stronger focus on setting goals, formal business planning and competitor and market
analysis, as well as anticipating the need to obtain support from external sources of funding
(which in the cases of SUB and OIL they had used before).
They maintained the same focus on planning whilst entering foreign markets as a
consequence of the learning curve after growing the business in Brazil. However, the founder
of HRM, who had the most experience compared to the others, focussed more on a step-by-
step approach (not the long term and goal setting), means orientation, experimentation and
flexibility to exploit the domestic opportunities in Brazil. In this case, this might have been
influenced by the different contexts from which the entrepreneur emerged (not a spin-off from
academia and not trained in a business incubator). The same choice was made by the founder
of VIS, even though in his case it was justified by not having the appropriate experience about
how to form a business plan and conduct market research. The cases also evidence the fact
that the development of capabilities to enter the domestic market was determined by the
entrepreneurs’ social networks. Pre-commitments were important from the outset to the
entrepreneurs of OIL, SUB and INT as they relied on their existing contacts to test and
experiment with their products, as well as to gain further exposure to approach potential
customers. In the cases of HRM and VIS, they planned to offer bespoke solutions to fit
customers’ needs.
When the entrepreneurs planned to initiate internationalisation, none of them had any
experience of internationalisation processes and had very limited knowledge of international
markets. To overcome the difficulties posed by this shortage of experiential knowledge, OIL
and INT’s entrepreneurs used their social networks to find information and take part in
international training programmes in the US. On the other hand, SUB and INT used their
social networks to identify sources for the additional funds needed to support the growth of
the firm and received investments from venture capitalists. The founders of HRM and VIS
planned to use extensively their networks to identify business partners for their joint ventures
abroad. Therefore, at the stage of international market entry, the results suggest that social
networks were more dominant than the experiential knowledge of the entrepreneurs in
developing their capabilities. These findings contribute to a better understanding of how
important the entrepreneurs’ individual resources (experience and networks) are to create
value for nascent firms in emerging economies and particularly in Latin America (Popli et al.,
2017; Hermans and Borda Reyes, 2020).
The aforementioned results also highlight the fact that the entrepreneurs were influenced
concerning the internationalisation decisions they made by their dependence on external
funds. This was noted by SUB’s and OIL’s founders, who relied on venture capitalists to
support the growth of their firms abroad, whilst HRM’s and VIS’s founders relied on joint
ventures with external partners to initiate businesses abroad. Therefore, when entering The
international markets, in all cases the entrepreneurs also had to operate within a context in internationali-
which they were not the only ones leading the business and had to abide by the expectations
(and regulations) imposed by the external funders. Consequently, the internationalisation
sation of
processes made the entrepreneurs dependant not only on their experience and networks (as TechnoLatinas
before) but also became more dependant from institutional mechanisms – particularly those
providing access to funds – to finance the growth of their businesses. This suggests that to
develop competitive advantages internationally nascent firms need to rely (and depend) on 703
external resources (such as funds) as well as balancing them with the individual resources of
entrepreneurs (Aguinis et al., 2020).
At the domestic market entry stage, the entrepreneurs relied on a mix of EO and CO to
build their capabilities. In general, the cases highlight a planned approach towards
augmenting their knowledge and seek firm-level resources to grow internationally. In
preparation of the internationalisation process, OIL, SUB and INT’s entrepreneurs
demonstrated a stronger CO and nil EO, whereas the HRM’s and VIS’s have shifted from
an E) (domestic market entry) to a stronger CO (and nil EO) (see Table 4).
On the other hand, the new business partners had shared with the entrepreneur (who
learnt from them) information about planning approaches and market and competitor
analysis. As the new partners were focussed on the maximisation of their expected returns,
they had reinforced the practices which had been already implemented by the founders of
OIL, SUB and INT and changing the ones previously used by the entrepreneurs of HRM and
VIS. In this sense, the cases of VIS, OIL and INT also suggest that the entrepreneurs were also
influenced by the managerial practices which were brought into the firm by the new members
of staff during their growth in Brazil (Spanos and Lioukas, 2001; Ployhart et al., 2011).
To enter international markets, the entrepreneurs relied on the practices which they had
already used (successfully) in Brazil (OIL, SUB and INT) and maintained their dominant CO.
However, the results also highlight that at this stage they all became in one way or another
more dependant and/or influenced by firm-level resources such as human and financial
capital and had strengthened their CO (OIL, SUB and INT; and shifted from an EO to a CO in
the cases of HRM and VIS). In this sense, the firm-level resources seem to have moulded the
entrepreneurs’ behaviour towards a more dominant CO rather than an EO – at the previous
stage, there was a lesser effect of firm-level resources in their decision-making as they were
also relatively fewer (no human capital, less need for financial capital).
Therefore, when entering international markets, the entrepreneurs were influenced by the
experiential learning, which they had accumulated domestically and augmented by sharing
experiences and knowledge with others (such as investors and new members of staff). In this
sense, said external resources have upgraded the entrepreneurs’ way of making decisions
(and accordingly impacted also changes of their EO or CO), while determining firm-level
capabilities to compete internationally (Aguinis et al., 2020; Hermans and Borda Reyes, 2020).

Implications for theory and practice

The availability of a combination of different resources (internal and external) at different
stages of a firm’s growth is pivotal to its growth; therefore, it is important that the right
resources are available for entrepreneurs at the right time and not concurrently, which is
mostly significant in contexts of resource scarcity (Amor
os and Cristi, 2008; Popli et al., 2017).
In early stages and coinciding with the domestic growth, the entrepreneurs have been able to
grow their business mostly based on internal resources (such as their experience and
networks); however, as they approach and enter international markets, they required
additional resources, which they have sought after. In doing that, they have changed the way
of making decisions as they became influenced but also dependent on said external resources
IJEBR (such as human capital and funds). In this sense, the institutional mechanisms that are made
27,3 available by policymakers (such as to provide funds for the internationalisation of
technology-based businesses, knowledge exchange and/or employability of highly skilled
professionals by said firms) should take into consideration the different stages of a firm’s
growth (domestic, international) to provide adequate responses and resources for the
entrepreneur and their companies.
The research also proves the efficacy of effectuation theory in terms of eliciting and
704 explaining the decision-making path taken by the new entrepreneurs for value creation. The
research outlines how the presence (or absence) of certain key resources and capabilities,
experiential knowledge and social networking influenced entrepreneurs’ decision-making
heuristics, namely effectual logic and causal logic whilst undertaking competitive analysis or
market entry decisions (Hafeez et al. 2002a, b). The exploitation of effectual logic in
conjunction with RBV is a novel contribution of this research and adds value to the RBV,
entrepreneurship and internationalisation literature.
Figure 2 summarises the key theoretical contributions of this paper.
This research has practical implications for studying international entrepreneurship (and
specifically in Latin America) as it expands the understanding of entrepreneurs’ heuristics
about the use of resources to enter new markets. Therefore, it is also important for
policymakers, practitioners and educators, as it augments the understanding of the factors
affecting the entrepreneurs from these geographies and their decision-making processes in an
international context, thus contributing to a better explanation and understanding about how
resource endowment can support the initiation and growth of TechnoLatinas’ businesses. For
entrepreneurs in emerging economies, the results of this research assists them to overcome
barriers to initiate and grow businesses domestically and, most importantly, internationally.
For entrepreneurs, particularly those in the emerging economies, the results of this
research are of assistance with regard to how to manage and overcome barriers to initiating
and growing their businesses, which is more relevant when they do not have all the resources
they need, and therefore they need to learn to combine the available means in order to plan.
Entrepreneurs can also learn from the cases to the extent that when facing similar
circumstances and challenges, they might be able to search for similar solutions to overcome
their difficulties. In particular, other countries in Latin America can learn much from the
Brazilian experience of leveraging entrepreneurship and innovation, for which university
incubators and support programmes provide a good example. For example, the institutional

Entrepreneur’s
Knowledge,
Know-how
Value creaon in
domesc market
Strong CO entry
Moderate EO

Capabilies
related to
Entrepreneur’s
exploing new
Social Networks
market
opportunies

Stronger CO
Lower/Nil EO Value creaon in
internaonal
market entry
Firm’s
Figure 2. Resources
Theoretical Human Capital,
Financial Capital
contributions
support made available had directly supported the development of business plans to conduct The
market analysis and execute foreign operations through financial resources and imparting internationali-
training.
Entrepreneurship educators can use the results of this research to provide examples of
sation of
and gain insight into how entrepreneurs can manage the resources available as well as seek TechnoLatinas
new resources to build the critical capabilities needed to grow their businesses. Moreover, the
educators in emerging economies, specifically in Latin America, can push for the introduction
of curriculum change based on flip classroom and problem-based learning through setting up 705
incubators in the university-related technology parks. In this sense, more than teaching that
one approach/case is better than another (as there should be no one size fits all in international
business education), it is perhaps recommended that there should be more focus on the
process and on the combination of different resources that can strengthen the entrepreneurs’
capabilities under different contexts and at different moments in time.
From the perspective of both RBV and effectuation theory, this research highlights that
infusing a subjective approach into the RBV has deepened our understanding about how
resources are managed (ex-ante) to create entrepreneurial-level capabilities related to entering
and exploiting new market opportunities, which subsequently impact on firm-level
competitive advantages (domestically and internationally).

Limitations and future research

This research is not without its limitations. The cases were from knowledge-intensive firms
sharing similar institutional and macro-environments in Brazil. Future research should
include a more diverse range of cases. On the other hand, although the cases suggest the
significance of resources, they are not clear on what types of resources may be more dominant
over others, or how such patterns might change through time. Hence, additional data and a
longitudinal approach can also be utilised in subsequent studies; for that, a quantitative
design might be more suitable to confirm and generalise findings.
Future research may explore how the new TechnoLatinas entrepreneurs and firms can
make use of virtual social networks and online community of practices (Hafeez et al., 2019)
that have proved to be instrumental in sharing experiential knowledge for entrepreneurs.
Moreover, the research took into consideration a specific set of individual and firm-specific
resources, and the results could have been different if other resources had been included (such
as firms’ technology and organisational assets). This research has focussed on an emerging
economy (Brazil) and, as noted, the results suggest that in these contexts the influence of
institutional factors, and particularly the firm-specific dependencies on institutional
mechanisms, should not be overlooked when analysing the impacts of the context on
entrepreneurs’decision-making heuristics. Furthermore, subsequent studies can address the
extent to which resources and the combination of different heuristics (effectual and/or causal)
may have greater or lesser effect on the value creation for firms entering global markets.

Conclusions
The research extends the RBV literature in the context of new firms in an emerging economy
in Latin America. The research highlights how experiential knowledge, along with social
networks, determines the development of capabilities to exploit new market opportunities.
The research also outlines the relevance of effectuation theory in terms of explaining the
decision-making process of entrepreneurs and how they develop new capabilities which are
vital to exploit said opportunities. The presence of experiential knowledge and social
networks drives a mix of causal and effectual heuristics; however, in the presence of firm-level
resources, the entrepreneurs tend to shift towards a stronger CO. The entrepreneurs are also
IJEBR affected by firm-level resources such as human and financial capital. The findings highlight
27,3 the importance of setting up institutional mechanisms that have proved vital in providing
new businesses with access to financial capital and in training entrepreneurs, thus, enriching
their capabilities to exploit new markets.

706 Notes
1. Do not confuse with entrepreneurial orientation which is not the focus of this research but in the
literature is often referred to with the same abbreviation, i.e. EO.
2. Brazil is the only Portuguese speaking country in Latin America, all the others being Spanish
speaking countries. Latin America countries have inherited cultural linkages with their former
colonialists (Portugal and Spain).

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About the authors

Nuno Arroteia is Senior Lecturer in Professional Development and Strategy at Leicester Castle
Business School/ De Monfort University in the UK. He holds a PhD in International Management and
Trade and is a Fellow of the Higher Education Academy in the UK. He has 15þ years of industry
experience in managerial roles at multinational companies as well as being a serial angel investor with
a portfolio across a diverse range of sectors, including education technologies. His main research
interests are about international entrepreneurship and entrepreneurial finance. His publications in
books such as “Enterprising Education in UK Higher Education” and “International Entrepreneurship
in Emerging Markets: Nature, Drivers, Barriers and Determinants” reflect his interests towards
bridging the teaching of entrepreneurship in Higher Education and the practical aspects of starting
and growing an international venture. Nuno Arroteia is the corresponding author and can be
contacted at: nuno.paulinoarroteia@dmu.ac.uk
Khalid Hafeez is Professor in Digital Transformation and Associate Dean at Leicester Castle
Business School/ De Monfort University in the UK. He has 25þ years of academic experience including
teaching, research, education management and technology transference. He served as the founding
Dean of the Claude Littner Business School University of West London and Dean of School of Quality
Management at Smart University Dubai, a tenure track professor, Director of External Relations and
Head of Operations Management Department at the York Management School, University of York UK.
Prior to this he was the Founding Director for the Centre for Entrepreneurship at the University of
Bradford. He is Fellow of the National Council for Graduate Entrepreneurs UK supported by the UK
Department of Trade and Industry and a life member of the European Foundation for Entrepreneurship
Research. He is also Certified Six Sigma Master Black Belt and Certified Project Manager and EFQM
European Assessor certified from Brussels. His publications in journals such as “International journal of
production economics”, “Computers and Operations Research”, “Total Quality Management and
Business Excellence”, “Electronic Journal of Knowledge Management” and “Total Quality Management
and Business Excellence” reflect his multifaceted research experience and interests.

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